Calculate the product break-even point

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Reference no: EM132786036

Question - One of the products that Jackson Ltd manufactures is known as Product (B). Unit cost and revenue data for the product is provided below.

£

Selling price 30.00

Variable costs 12.00

Contribution 18.00

Fixed costs are £66,000 per month.

Last month the business produced and sold 6,400 units. This activity level represents 80% of current production capacity.

Required -

1. Calculate the contribution / sales ratio (C/S %)?

2. Calculate the product break-even point (in units and £s sales)?

3. Calculate the level of sales (in units and £s) required to produced profits of £42,000?

4. Calculate the current production capacity (in units)?

5. Calculate the margin of safety (in units and £s)?

6. Calculate the total business profits if all spare capacity were to be sold for £20.00 per unit?

Reference no: EM132786036

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